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Inequality

The document discusses inequality in India, analyzing that the richest 1% own 60% of the country's wealth while the poorer half own only 4.1%. It introduces the Lorenz curve and Gini coefficient as tools to measure inequality numerically, with India scoring lower on equality than several other nations. The consequences of inequality mentioned include social unrest, rising subsidies, and hindering economic reforms.

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23 views4 pages

Inequality

The document discusses inequality in India, analyzing that the richest 1% own 60% of the country's wealth while the poorer half own only 4.1%. It introduces the Lorenz curve and Gini coefficient as tools to measure inequality numerically, with India scoring lower on equality than several other nations. The consequences of inequality mentioned include social unrest, rising subsidies, and hindering economic reforms.

Uploaded by

snapyn9
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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INEQUALITY

• Inequality is that gap between rich and poor of society. The greater gap the
greater is the Inequality. IT essentially refers to the economic disparities
existing in the society.
• The simplest way to understand inequality is by analyzing the population by
dividing from poorest to richest and reporting the proportions of income
held by them.
• Example: if the bottom 20% of the population held 20% of the economy’s
income and the top 20% held 20% of the economy’s income, then we can call
the society highly equal. But it is hardly the case, as the bottom 20% of the
population hardly owns more than 3% of the total
wealth of the economy.

ANALYSIS OF INCOME INEQUALITY IN INDIA


• In the recent years, India has joined the club of most unequal countries.
Based on the new India Human Development Survey (IHDS), which provides
data on income inequality for the first time, India scores a level of income
equality lower than Russia, the United States, China and Brazil, and more
egalitarian than only South Africa.
• In India, the richest 1% own 60% of the country’s wealth, according to the
latest data from OXFAM.
• At the other end of the pyramid, the poorer half held a
mere 4.1% of national wealth.

LORENZ CURVE
• Lorenz curve indicate inequality in an economy. It is a graphical
representation of the distribution of income or of wealth. It measures the
income inequality in the society.
• It is used to calculate GINI Coefficient which is the numerical indicator of the
inequality in a country.
• Area between line of perfect equality and the Lorenz curve- A
• Area between line of perfect equality and line of perfect
inequality- A+B
• GN – A/(A+B)
• The Gini Coefficient measures the degree of income equality in a population.
• The Gini Coefficient can vary from 0 (perfect equality) to 1 (perfect
inequality).
• A Gini Coefficient of zero means that everyone has the same income, while
a Coefficient of 1 represents a single individual receiving all the income.

CONSEQUENCES

Social unrest like


Jat
Andolan,Naxalism

Increase in Rise of Economic


Burden subsidies populism

Consequences

Rise in Derailing the pace


intergenerational of economic
Inequality reforms

Distress Migration
from poorer to
richer districts
HOW TO REDUCE?

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